This invention relates to inventory and price decision support.
Inventory and price decisions are critical to a distributor of retail merchandise as it seeks to maximize profits within an acceptable level of risk. Inventory decisions involve which products (items) to buy for resale, how much of each item to buy, when to buy, in which stores to place the items for resale, and when to place them in the stores. Pricing decisions determine what initial prices to set for each item and when and by how much to reduce prices.
Inventory and price decisions are made in the context of product demand. Product demand over time may differ for fashion items and basic items. Fashion items (such as high-style dresses) may face rapid shifts in demand and have short lifecycles (measured in months). Basic items (such as men's underwear) exhibit long lifecycles (measured in years) and slowly changing demand.